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tatiyna
2 years ago
14

If the reserve ratio is 50%, what is the deposit multiplier? (eco

English
1 answer:
ludmilkaskok [199]2 years ago
3 0

If the reserve ratio is 50% the deposit multiplier will be equal to 2.

<h3>What is a deposit multiplier?</h3>
  1. It is the amount of money that the bank can add to the cash supply in a loan.
  2. It is the amount of money created from a reserve.

To calculate the deposit multiplier you will need to take into account the inverse of the reserve ratio. In this case, you will need to use the following expression:

1/(reserve index)

Substituting the values in the formula we will have:

1/(0.50)= 2.

Learn more about bank loans:

brainly.com/question/14721223

#SPJ1

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